Wedbush's Dan Ives says companies now dedicate roughly 15% of their IT spend to AI—up from 2% a year ago—as applications proliferate across industries. He highlights Palantir (PLTR, Financial) specifically, which has ramped from 10 to 85 distinct AI use cases in 12 months, demonstrating the rapid real-world adoption of machine learning and analytics tools.
Ives warns that while “the technology is going 100 mph in a Ferrari,” regulators are stuck “at 35 mph in the right lane,” making meaningful government intervention unlikely in the near term.
This spending boom is driving consolidation in the tech sector, with giants like Microsoft (MSFT, Financial), Alphabet (GOOG, Financial) and IBM (IBM, Financial) poised to acquire smaller AI specialists to shore up their capabilities and market share.
Even economic headwinds and tariff threats won't slow the AI wave; instead, companies under pressure are turning to automation and machine intelligence for efficiency gains. As Ives puts it, “the strong are going to get stronger” as this next industrial revolution unfolds.
Why it matters: With AI's transformative impact already clear—especially in companies like Palantir—organizations that fail to integrate advanced applications risk falling behind, while investors should watch M&A activity and budget shifts toward leading AI vendors.
Investors will look for signals in upcoming earnings calls and any regulatory guidance out of Washington to see whether industry self-policing or formal rules will steer AI's next chapter.
